FTX Investor Sues Sequoia Capital, Thoma Bravo, Paradigm
- Class action says PE, VC firms gave ‘air of legitimacy’ to FTX
- Earlier complaints targeted celebrity promoters of exchange
This article is for subscribers only.
Venture capital and private equity firms including Sequoia Capital, Thoma Bravo and Paradigm were accused in a lawsuit of hyping the legitimacy of FTX, the cryptocurrency exchange that collapsed causing billions of dollars in losses.
The firms participated in a marketing campaign in 2021 to tout their own investments of hundreds of millions of dollars in FTX entities, according to the proposed class-action complaint filed Tuesday on behalf of investors. The promotion added an “air of legitimacy” to the enterprise that ended up going bankrupt in November and whose co-founder Sam Bankman-Fried now faces criminal charges, the investors allege.